5 Common Repairs You Should Know How to Do For Your Rental

Posted on by Bay Management Group

Common Repairs You Should Know How To Do Yourself For Your Philly Rental Property

Property management in Philadelphia doesn’t have to be difficult.

Even if you self-manage your rental property, there are things you can handle on your own, including some maintenance or repair tasks.

Sure, DIY repairs may take a little more time and effort on your part to complete, as opposed to hiring someone to do the work for you.

However, sometimes it’s good to hone your skills as a landlord, show your tenants you are willing to put the work in, and save money in the process.

Of course, there are those projects that are better left to the professionals, or the maintenance crew your Philadelphia property manager has on hand for you.

But today, we are going to focus on the things you should know how to do yourself.

 

Rental Property Repairs You Can Do Yourself

 

1. Repairing Drywall

Repairing Drywall is a Rental Property Repair You Can Do Yourself

There is nothing like finding out your tenant has put a hole in the wall of your property. Luckily, repairing drywall is not very hard to do.

For small holes, some putty and spackle are all you need. Just make sure you always have extra paint on hand – you don’t want to be the type of property owner that mismatches paint colors while repairing holes in the wall, no matter how small they are.

If the hole in your property’s wall is large, you will need to cut out around the hole, cover it up with a piece of replacement drywall, and attach that piece using drywall tape. Then, simply sand it down and paint over it.

 

2. Squeaky Floors

Squeaky floors are not just a nuisance to those walking around on them. They can be a sign that wood is rubbing against a nail, neighboring wood pieces, or even ductwork and piping. And, as The Family Handyman states, finding the source of the noise can be difficult.

However, once you identify where the squeak is coming from, remedying the issue can be as simple as sprinkling talcum powder into the cracks to see if the squeak stops. If not, you may need to take your repair skills up a notch, and add some support braces to stop the noise from continuing.

 

3. Unclogging a Drain

Unclogging the Drain is a DIY Project For Your Philly Rental Property

Sinks, whether in the kitchen or bathroom, are known to clog from time to time. And knowing how to effectively unclog them is a useful skill to have when it comes to caring for your rental property (and your own home as well!).

Here are some easy DIY tips for restoring normal use to a sink that has become clogged:

  • Clear the drain of material such as hair or food
  • Add a store bought drain cleaner, and follow the instructions
  • Create your own natural drain cleaner using baking soda and vinegar
  • Use a bent wire hanger to reach down into the drain and fish out the culprit clogging it
  • Try a plunger for the kitchen sink
  • Pour boiling water down the drain and watch it clear
  • Clean the pipe – especially the U-shaped one underneath the kitchen sink
  • Buy a drain snake

 

Your unclogging solution will depend on the reason your sink is clogged in the first place. However, before you start calling in a potentially expensive plumber, try these easy hacks first.

 

4. Gutter Maintenance

In Philadelphia, where the seasons cycle forcefully every year, knowing how to maintain your property’s gutters is a must.

If you allow broken rain gutters to drain rain water improperly, you face ruining the siding of your property, damaging the soil near the foundation, and possibly creating a leak that leads to the inside of the rental, all of which are no good.

Here are some common gutter repairs you can easily do yourself:

  • Patch a hole. Rust, tree branches, and sharp tools are all ways your gutters can develop holes in them. Patching a hole immediately is necessary if you don’t want it to increase in size. Buy some roofing cement from your local hardware store to plug those holes up.
  • Improper Draining. In order to avoid having to patch a hole in your gutter (see above), do not drill a hole into a gutter midway to encourage draining. If your gutter is not draining water properly, it is either not slanting in the right direction, or is sagging and needs to be raised. Both of these are easy fixes.
  • Leaky Joints. Water dripping from the joints of your gutters is a common issue, especially for properties in rainy regions. In fact, even seamless gutters are prone to some level of leakage. Replace the spikes that hold gutters in place to help with sagging, leaky joints, and the foundation of the gutter on your property’s exterior.

 

Rain gutters are a necessary part of your Philadelphia rental property. And, as any high quality property management company will tell you, having your existing tenants properly maintain the gutters during their tenancy is a good idea. However, even with the best maintenance, wear and tear will eventually create issues.

Luckily, most gutter issues are easily fixed, and do not require the help of a professional. That is, so long as you inspect your property routinely, and tackle minor issues before they become major.

 

5. Other Easy DIY Repairs

Caulking the Bathtub is a DIY Project For Your Philly Rental Property

In addition to the ones mentioned above, there are other DIY repairs that you can easily handle yourself:

  • Toilet Issues. Clogs, lever issues, and broken seals inside the tank are all doable without the need for a professional.
  • Light Switches and Outlets. Not only can these things become faulty with lots of use, the plates can become damaged and unsightly if not maintained. Replacing light switches and outlets is easy to do – simply buy new components, match the wires, and replace the covers.
  • Caulking. The caulking around bathtubs and sinks tend to wear down, crack, and peel over time. Buy a tool to remove all old caulk and then, using a caulking gun, replace the grout areas with fresh caulk that is not stained or damaged.
  • Replace a Roof Shingle. Use a hammer to pry old damaged shingles off your roof, along with surrounding nails, and place a new shingle in its place. Just don’t forget to nail it back into place, and consider adding roofing cement to make sure it doesn’t slide off.

 

As you can see, rental property maintenance does not consist solely of major repairs such as foundation work, sewer breakages, HVAC repairs, and water damage. And, while those repairs may break the bank, and will definitely require professionals, not all repairs call for a maintenance crew.

 

However, if you own a rental property in the Philadelphia region, and do not want to deal with the hassle of performing even the smallest repairs on your property, get in touch with Bay Management Group today. We have a 24/7/365 maintenance and repair crew on hand to handle every issue you have with your property, no matter how big or small.

In addition, we are committed to using reliable, trustworthy, affordable, and timely contractors for all repairs your rental property may need. Not only can we ensure that all property repairs are handled efficiently, we ensure they are performed promptly to prevent further costly repairs in the future.

3 Secrets to Being a Profitable Investment Property Owner

Posted on by Bay Management Group

Secrets to Being a Successful Property Owner in White Marsh, Maryland

America has experienced a solid growth in housing prices over the last five years, and it is safe to say the demand for housing is continuing to rise, thus driving housing prices higher and higher.

For many people, these price increases are making it so that purchasing a home is no longer an option, and they are turning to renting instead.

But if you’re looking, and able, to invest in rental property, then you are in the sweet spot for purchasing more homes to add to your portfolio.

Since the housing bubble is still on the rise (and hasn’t topped out at exorbitant prices yet), and the number of people renting is still increasing, those looking to invest in rental property in the Baltimore area can still afford to make sound purchases, and continue to make a profit from their rentals.

However, what property investors cannot afford is to make mistakes during this delicate time.

That’s why today, we are going to explore some of the top secrets to becoming a profitable investment property owner.

 

Top Ways to Guarantee You Are a Profitable Baltimore County Property Owner

1. Calculate the Numbers

Calculate the Numbers to Find Success as a Property Owner in Maryland

In order to turn a profit on your Baltimore County rental property, it is crucial you crunch the numbers, not once, but twice, to ensure you are making a sound financial decision.

Gather information about your property, properties surrounding yours, and the overall housing market in your area. Analyze what the housing market is doing right now, how much similar properties are going for, and what you can expect to garner in monthly rent amounts.

Then, take a look at the state of your financials. Include things such as an emergency fund, maintenance and repair fund, and miscellaneous expenses such as insurance, upgrades, and the enlistment of Baltimore County property management, and see if the entire equation comes in at, or below your budget.

Only then, after all the numbers come out in your favor (with a little wiggle room accounted for), should you even consider making an investment in a particular property.

Sound like a lot of work?

Being a property owner is no small feat. And, if you want to be a profitable rental property owner, it is going to take serious dedication.

 

2. Understand the Unethical Real Estate Agent

There is no denying that there are shady people in all industries throughout the world.

And, real estate is no different.

With real estate being such a lucrative business for all parties involved, especially in the current market, there are unethical practices going under the radar everywhere.

As a rental property investor, it’s important you understand the types of unethical practices sneaky real estate agents can pull on people that are unaware that real estate scandals even exist.

And, just because you have a few properties in Baltimore does not mean you are an expert at investing. After all, the only way to grow your business is to continue to learn.

Take it from some of the best property management companies in Baltimore – real estate agents have been known to do the following:

  • Convince buyers that a property will sell for a specific price point, only to find out the seller had no intention of selling it for that low
  • Have buyers spend upwards of a thousand dollars on needless inspections, knowing full well the seller was never going to sell
  • Dummy bid at auctions that they convinced a buyer to attend, forcing the buyer to walk away with nothing, or be pressured into paying above their price limit for a property they really want
  • Sell a property to an investor, knowing that another buyer also paid for the same property, but at a higher price
  • Encourage investors to over-pay, because the end profit will far surpass the extra cash being spent on the property’s sale price

 

Some of these tactics simply cause a lot of unnecessary stress on investors looking to add to their portfolios, while others are more serious. And, while some of these practices may not directly affect a real estate agent, the lack of empathy and concern for their client is unethical in itself.

Additionally, some of these unethical practices do financially benefit real estate agents, and harm the buyer, which causes a general distrust of agents across the board.

Make yourself aware of the types of scams real estate agents are capable of conducting, so that you do not fall victim to one, and end up losing a lot of your time and money.

 

3. Hire a Baltimore Property Management Company

Hire a Baltimore Rental Property Company

Although the first two tips focus on the actual acquisition of your investment property, profitability will play well into the leasing of your property.

After all, you wouldn’t want to purchase a great property and ruin it by self-managing it, and making rookie mistakes that tank your positive cash flow, would you?

This is why enlisting the help of a property management company, such as Bay Management Group, can be incredibly beneficial to your success as an investment property owner.

With the right property manager in Baltimore, you can reap the following benefits to help boost your profits:

  • Aggressive advertising of your newly acquired property through multiple platforms that will garner the attention of a high-quality tenant pool is the key to quick tenant placement. This reduces your vacancy times and, thus, the time you have to pay for the property’s mortgage. The quicker a tenant is paying rent, the less money you spend paying for your property.
  • Tenant Screening. Placing the right tenants in your Baltimore County property is the key to getting paid high rent rates, on time, every time. It also reduces the chances of property damage, breaches of the lease agreement, and, ultimately, evictions.
  • On-Call Maintenance. Having a property management company that supplies their own on-call maintenance crew to handle repairs and maintenance requests not only satisfies tenants (which can help with lease renewals), it also saves you money. Strong relationships with highly qualified, timely, and affordable contractors makes fixing your rental property less expensive.
  • Routine Inspections. Consistently checking on your investment property will reveal when a tenant is not fulfilling their lease obligation to care for your property, according to the lease agreement. In addition, it reveals minor problems, which if fixed early on, can save you a great deal of money and stress.

 

Having an experienced property management team on hand to help you manage your property, after all the hard work you put in to make a good investment, can further your chances of becoming a profitable investment property owner.

If you own investment property in the Baltimore County area, and are looking to increase your profitability, contact Bay Management Group today. With the lowest monthly management fees in the region, and the ability to provide all of the above, plus more, when it comes to managing your rental, you will surely garner a positive cash flow on any rental property you own with our help.

How to Properly Clean Your Rental Home Prior to Listing

Posted on by Bay Management Group

How to Properly Clean Your Rental Prior to Listing

Preparing your Philadelphia rental property for your next tenant is extremely important to the success of your rental property business.

Typically, prospective tenants are expecting a spotless rental that is ready for them to move all of their personal belongings into right away.

And, don’t think that interested tenants will not notice if the property you are showing is dirty.

Providing a sparkling clean Philadelphia rental property when it becomes available is not only the right thing to do as a property owner – doing this also provides you a great opportunity to make an exceptional first impression on your prospective tenants.

Thus, today we are going to share with you ways to properly clean your rental home prior to listing (and of course tenant move-in), so that you impress anyone that shows interest in your property.

 

4 Expert Ways to Clean Your Philadelphia Rental Property Before Listing It

One of the easiest ways to ensure your rental property is cleaned properly is to follow a cleaning checklist.

To make things even easier to follow, we will separate this list according to room type.

 

1. Kitchen

Expert Ways to Clean Your Rental Property Kitchen Prior to Listing

Before beginning your cleaning work in the kitchen, our Philadelphia property managers recommend doing a quick run through and make sure everything from the previous tenant has been removed from the cabinets, drawers, and refrigerator.

From there, it is time to start wiping down the following:

  • Cupboards
  • Oven
  • Microwave
  • Refrigerator
  • Counter tops
  • Window sills and ledges

One of the best ways to clean the inside of a microwave that has been neglected is to:

  1. Spray some multi-surface cleaner inside (make sure you spray enough to generously cover the entire inside surface)
  2. Turn on the microwave for 30-60 seconds
  3. Once finished, simply wipe everything away

Avoid cleaning stainless steel appliances with harsh chemicals that contain ammonia, scouring pads or powders, or anything else that is abrasive.

Why?

Because this will not give you the cleaning you’re after, and will also scratch the appliance while you’re at it.

Your best bet is to use a soft cloth and some mild dish detergent to get grease and food spots off.

When it comes to the kitchen sink, a great tip for making sure everything is completely clean, pipes and all, is to:

  1. Run the faucet on hot for one minute
  2. Pour 1/3 cup of baking soda down the drain
  3. Follow up with ½ cup of white vinegar
  4. Let this mixture sit for 5 minutes, and then run the hot water again to clean the drain from any smells and debris

And, when all the above is complete, do a thorough sweep and mop of the floors.

 

2. Bathrooms

A dirty bathroom is enough to turn any prospective tenant away from wanting to lease your rental property.

How to Clean Your Rental Property Bathroom Prior to Listing

Our property managers in Philadelphia recommend the following common steps to make your bathrooms sparkling clean:

  • Use a generous amount of toilet bowl cleaner, and let it sit for at least 10 minutes
  • Use the same baking soda/white vinegar mixture from the above kitchen checklist on the tub and sink drains
  • Use a tough shower cleaner to clean the walls and shower door that will erase all water spots
  • Check for any mold or mildew, and handle all issues immediately
  • Wash the walls, light switch plates, outlet plates, door knobs, and baseboards
  • Replace all burned out light bulbs
  • Clean the sinks, countertops, and faucets
  • Dust window sills and ledges
  • Clean the inside and outside of all cabinets and drawers
  • Get back to the toilet and scrub away, including the outside of the bowl
  • Sweep and mop the floors

 

3. Bedrooms/Living Room/Dining Room

We have combined these rooms into one category, because they have similar features that should be cleaned in similar ways.

The first step in these rooms is to make sure your previous tenants did not leave any personal belongings behind. This is especially true in the closets, where things are easily forgotten or left behind.

Next, dust any ledges and windowsills, and get rid of any cobwebs. Make sure to pay special attention to the ceiling corners.

In addition, dust the ceiling fans. This is one of the most neglected things in any household, so the chances your previous tenant cleaned them are slim.

How to Clean Markings Off the Walls of Your Rental Property

To clean off the walls consider the following tips. For:

  • Pencil Markings. Use a simple dish soap and water mixture.
  • Ink Markings. There are several ways to get ink off the walls. You will likely need an alcohol-based solvent such as rubbing alcohol, or even hairspray that contains alcohol. You may also be able to use a mixture of baking soda and water (mixed into a paste), or a mixture of ammonia, lemon juice, and detergent.
  • Marker or Crayon. One of the best things you can do to remove marker or crayon is to use a Mr. Clean’s Magic Eraser. Just make sure to test it out before scrubbing away, as it may remove you wall’s paint.

Once the walls, outlets, light switch plates, and ledges are cleaned, you can move on to cleaning the windows and floors.

 

4. Exterior

Clean the Exterior of Your Rental Property Prior to Listing

When a potential tenant pulls up to your Philadelphia rental for a showing, the first thing they see is the exterior of your home.

That’s why it is crucial you make sure to clean up both the front and backyards before showing your property.

  • Mow the lawn and pull any weeds
  • Trim all bushes, trees, and hedges
  • Clear out the rain gutters
  • Sweep walkways or porches
  • Add foliage where needed to make it look fresher
  • Clean the pool, decking, and any pool accessories
  • Wipe down any patio furniture, including the tables and chairs
  • Ensure all light fixtures are in good working order
  • Clean the outside of the windows

In addition to the front and backyard areas, it is important you not neglect the garage.

This is an often forgotten section of the house, by both previous tenants and property owners, when it comes to tidying up a rental.

Make sure to thoroughly clean the walls, shelving, and floors.

Also, if there is anything in the garage, such as trash cans (make sure they are empty), or landscaping tools, such as a lawnmower, tuck them neatly to the side so potential tenants can get a full idea of how large the garage is.

Just as you expect tenants to thoroughly clean your property upon move-out, you can believe that new tenants will want a spotless property upon move-in.

And, the best time to clean up your property is before you even list it as available.

That way, when interested tenants make appointments with you or your Philadelphia property manager to see your property, it is ready to go, and tenants are impressed from the start.

 

If you own a rental property in the Philadelphia region and need help with advertising your sparkling clean rental property to a high-quality tenant pool, contact Bay Management Group today.

With experience in how best to design your vacancy ads, the resources to advertise your vacant property across multiple highly-trafficked platforms, and a strict tenant screening process in place, you can rest assured we will have the perfect tenant placed in your rental within 30 days of being listed.

6 Reasons to Make Your Howard County Property Eco-Friendly

Posted on by Bay Management Group

How to Make Your Howard County Rental Property Eco-Friendly

Did you know 40% of the United States’ total annual energy consumption is swallowed up by residential and commercial sectors?

That’s a lot of energy.

In addition, it is suggested that Americans leave an average carbon footprint of nearly 5 times the worldwide average.

Measuring in at 50 tons of total greenhouse emissions per United States household each year, this is not something to be proud of.

Now, imagine how much greener and cleaner our environment would be if everyone combined their efforts to make their homes more eco-friendly.

In fact, if everyone took part in conserving the environment, the country as a whole would see a healthier planet, healthier citizens, and healthier plants and animals.

If you own rental property in the bustling area of Howard County, where income is high, students are excelling, and unemployment rates are low, you should consider making your rental more eco-friendly.

There are several reasons why all property owners should aim to make their investment properties more eco-friendly.

And today, we are going to explain those reasons in hopes of inspiring you to take part in conserving our planet’s natural resources.

 

Why Making Your Howard County Rental Property Eco-Friendly Is A Great Move

 

1. Your Rental Property’s Value Will Increase

Making Your Rental Property Eco-Friendly Will Increase Property Value

People are more aware than ever of how their behaviors and lifestyles are affecting the Earth as a whole.

This applies to your Howard County tenants as well.

Leasing a green rental property is enticing to many of your prospective tenants – they want to know they are doing their part when it comes to being eco-friendly.

Plus, they want to enjoy the benefits that a green rental offers them, such as healthier air to breathe, and lower utility bills.

Even if you only splurge on small eco-friendly upgrades to your home, – such as installing window treatments or upgrading your appliances to energy efficient models – your property becomes more appealing to those seeking an environmentally friendly rental.

With a tenant pool full of people wanting an energy efficient home, you will be able to command the highest rent rate possible, and reap the benefits in the form of additional rental income.

 

2. It’s Cost Efficient

The United States Green Building Council estimates that by increasing our eco-friendly building efforts, the United States can achieve upwards of $1.2 billion dollars in energy savings between the years 2015 and 2018.

You would be wise to think that those savings will trickle down to your Howard County tenants at one point or another if your investment property is part of this green effort.

In fact, more money in your tenant’s pocket means on-time rent payments, more money to spend on higher rent rates, and of course, more money to be spent on shopping, dining, and entertainment in the area your rental property is located.

All of this is helpful in keeping your tenants in your property for the long haul.

 

3. It Helps the Job Market

Eco Friendly Rental Properties Help The Job Market in Howard County

Although not directly related to your profits as a Howard County property owner, green construction can have the same trickle-down effect mentioned above.

Spurring nearly 1 million jobs in the United States by 2018, green construction is expected to directly influence the nation’s unemployment rate and economy.

And, as a property owner, you know that if the prospective tenants in your area have high-paying, stable jobs, they will have more money to spend on a rental home such as yours.

In addition, by investing in larger scale projects such as installing solar panels on your rental property’s roof, not only are you taking part in the eco-friendly movement with your own property, you are employing people that might otherwise not have had stable jobs before the green movement.

 

4. Your Tenants Will Breathe Easier

Eco-friendly rental homes offer your tenants better indoor air quality than any non-environmentally friendly, new or pre-owned home will because of the materials used to build them.

This makes being inside physically better for your tenants and their families, which is something any tenant can appreciate.

If your rental was not built to be eco-friendly, that’s okay.

One of the best ways to ensure healthy air for your tenants is to use paints and cleaners that are low in volatile organic compounds (VOCs).

This reduces your tenant’s exposure to carcinogens such as formaldehyde.

 

5. Your Green Rental Will Last Longer

Your Eco-Friendly Howard County Rental Property Will Last Longer

Sometimes recycled materials, even those used in the construction of your rental property, are more durable than traditional construction materials, giving your rental property the chance to last longer than ever.

For example, using recycled steel over wood planks, concrete as a form of home insulation, and dark colored roofing materials made out of recycled products, all help to make your property last longer, keep utility bills lower, and offer better health conditions for those residing in the actual property.

In the end, by using recycled (and oftentimes, more durable) materials on your rental property, you will spend less time and money maintaining your property, which means more money in your pocket.

 

6. You Will Lessen Your Impact on the Surrounding Area

Having an eco-friendly rental property does more for the environment than just help your tenants save on their energy bills and breathe easier.

Green building has less of an overall impact on the surrounding environment – that is the goal behind the entire movement of “going green.”

For example, construction companies will only take down foliage that is directly in the way of the project they are working on.

By keeping your backyard landscaping as natural as possible, even if you are simply re-doing the yard, adding a deck or pool, or are increasing the square footage of your rental property by adding an extra room, you can do your part by preserving the surrounding area.

In addition, by leaving the surrounding foliage, you allow this natural habitat to work for you.

Extra trees and bushes surrounding your home better insulate the property from the harsh weather conditions that affect your tenants during both the summer and winter.

 

If you live in the Howard County area, and own a rental property that is currently eco-friendly, contact Bay Management Group today to help place equally environmentally friendly tenants in your investment property.

With aggressive advertisement of your vacant property to the tenant pool that seeks an eco-friendly rental home, we can make sure to get the highest quality tenant in your rental property.

Our thorough screening process ensures placement of tenants that appreciate your efforts to help save the environment and reduce your carbon footprint, as well as their own.

In addition, your eco-friendly rental will bring in high rent rates, and will be carefully monitored by an experienced Bay Management Group property manager to make sure your tenants are caring for your eco-friendly property as they should.

What Fees to Expect When Financing a Rental

Posted on by Bay Management Group

What Fees To Expect When Financing a Rental Property in Montgomery County

You may look at the price of a potential Gaithersburg investment property, and think you’ve got a fairly good deal.

However, do not be fooled – more lies beneath the surface.

Besides the price tag of a rental property, there are numerous miscellaneous fees you can expect to pay when financing a rental.

But do you know what those fees are?

If you are looking to invest in a rental property in the Montgomery County area, and are curious about what fees to expect while financing that property, keep reading.

Today we are going to give you the lowdown on what you can anticipate paying while financing a Gaithersburg rental property, so that you don’t walk away more empty-handed than you expected to after this major purchase.

 

10 Common Fees to Expect While Financing a Rental Property

 

1. Private Mortgage Insurance

If you put a small down payment on a rental property (typically less than 20% down), it is likely you will need to purchase what is called private mortgage insurance (PMI).

This policy will protect your lender from losing money, should you end up foreclosing on the property.

The problem with this added fee is that sometimes the private insurer providing you PMI requires you to pay an entire year’s worth before closing on the property you are purchasing.

This can add up quickly, and adds a sizeable amount to an already expensive purchase.

 

2. Homeowners Insurance

Homeowners Insurance Is a Fee To Expect In Your Montgomery County Rental Property

Another common type of insurance that is typically required while purchasing a rental property (and is recommended even if it’s not required), is homeowners insurance.

This policy will protect you should your tenants, or some unforeseen disaster, damage the structure of your property in any way.

While homeowners insurance can be paid monthly throughout the year, thus reducing your upfront costs at the time of financing your property, you will still need to have a policy in place before closing on the rental, which means some sort of payment will need to be made right away.

 

3. Title Insurance

Title insurance is a way to protect yourself in the event the seller of the property you are purchasing did not in fact own the property, yet sold it anyway.

This kind of insurance protects both you and your lender from any losses arising from ownership disputes.

 

4. Processing Fee

Another Common Fee is the Processing Fee With Your Montgomery County Rental Property

When you apply for a mortgage with a financing company, there are application fees that you are expected to pay.

These fees do not typically surpass $500, though it is important you keep track as you continue through the process.

 

5. Origination Fee

In addition to paying a processing fee, you will be responsible for paying an origination fee to the bank or lender you are financing your Gaithersburg property through.

This is your way of paying them for creating the loan you are being approved for.

 

6. Credit Report Fees

Include Credit Report Fees With Your Montgomery County Rental Property

Just like other major purchases people make that come with loan terms (e.g. cars, boats, and major appliances), your lender will want to run a thorough credit check on you before even thinking about loaning you money to finance a rental property.

This also includes any courier or postage fees. Do not expect the bank to pay for all of this for you.

 

7. Survey Fee

Drawing up a precise legal boundary of the property you are trying to purchase, as well as including other details related to the property’s land, must be done before the closing of an investment property, if an existing survey does not already exist.

 

8. Appraisal Fees

An appraisal consists of a professional appraiser evaluating the property you are purchasing, and estimating its market value.

You must have an acceptable appraisal before you can finance a rental property.

Why?

A good appraisal is in place so that lenders do not give away too much of their own money.

In short, lenders need to know that the property you are purchasing is worth more than what you are paying for it. This way, should housing prices drop, lenders can easily recover their money.

 

9. Inspection Fees

Not all lenders require a general inspection of the property you are about to finance.

However, with things such as mold and pests being such a costly problem to deal with later on, it is sometimes worth the money to have a thorough inspection performed at the rental you are about to finance.

The last thing you want to deal with is a landlord-tenant dispute over who is responsible for pests in a rental.

In addition, it is your legal responsibility in Maryland to ensure that your tenants have a safe and habitable home to live in, free of mold or lead paint.

 

10. Recording Fees

Recording fees are fees you will pay the county or city to officially record all of the real estate documents that are drafted during your investment property purchase.

In Montgomery County, you will pay $6.90 per thousand dollars financed, $10.00 per thousand dollars financed over $500,000, a 1.5% transfer tax (1.0% to the county, 0.5% to the state), and a property tax of $0.883 per hundred dollars assessed.

 

Financing a rental property in Montgomery County is no easy feat.

You do not simply look at the price tag of the property and pay that amount.

Unfortunately, many first-time buyers do not understand this process in full, and can become very surprised, and discouraged, during the closing process.

Do not let this happen to you.

If you are looking to invest in a Gaithersburg rental property, or perhaps have just invested, and are facing not only the reality that you now have a mortgage to pay, but also that you have no tenants in your property, contact Bay Management Group today.

We can place a tenant in your rental property within 30 days or less of being hired on to help you.

In addition, we charge a low 8% monthly management fee, which is amongst the lowest in both the Baltimore and Washington, D.C. metro areas.

 

Self-managing a rental property is a tough gig after just going through the exhausting process of financing a new property.

Let us at Bay Management Group help you manage your property for a low monthly management fee, and place high quality, high paying tenants in your rental so you can start to recoup some of those fees you paid during the financing of your property.

5 Mistakes You Could Be Making With Your Lease Agreement

Posted on by Bay Management Group

5-mistakes-you-could-make-with-lease-agreement

Becoming a successful investment property owner in Chevy Chase, MD takes a lot of real estate expertise.

You must be familiar with how to:

  • Finance and purchase rental properties
  • Place high quality tenants and collect timely rent payments
  • Maintain and repair your property whenever an issue arises
  • Keep your tenants satisfied so they will want to renew at the end of their lease term

However, one of the most important things to know and understand as a Montgomery County property owner is how to construct the perfect lease agreement.

Knowing how to protect the interests of you and your investment property via a signed lease agreement is crucial to avoiding legal problems in the future.

But do you know what common mistakes even the most experienced landlords make when drafting a lease agreement for their rental property?

If not, you are not alone.

Many property owners do not have the help of an experienced property manager to draft thorough lease agreements that touch upon everything that is important to the owners.

And, unfortunately, as a result, these mistakes cause harm to their rental property business.

Today we are going to examine some lesser-known mistakes you might be making with your lease agreement, in hopes that you can become the successful property owner you desire.

 

5 Mistakes You Are Making With Your Montgomery County Lease Agreements

So many things go into drafting into a solid lease agreement.

Whatever provisions you decide to add, be sure to always include the following basics:

  • Tenant names and personal information
  • Lease term start and end dates
  • Rent collection amount and procedures, including late-payment penalties
  • Security deposit and pet fee deposit amounts
  • Additional fines, fees, and charges your tenant is obligated to pay
  • Property access information
  • Proper use of the property and consequences for breaking the rules
  • Signatures of both parties

Failure to include any of the above is automatically considered a major lease agreement mistake. This is general information that all lease agreements should include, no matter what.

However, some things are more landlord-specific that can be considered a mistake as well, if not drafted correctly into your lease agreement.

Read on to find out if you are making any of these lease agreement mistakes so that you can fix them come the next time you place a tenant in your Chevy Chase rental property.

 

1. Using Outdated or Incorrect Forms

using-outdated-or-incorrect-forms-causes-problems-lease-agreement-chevy-chase-rental-property

For those that self-manage their Chevy Chase rentals, it is important you take special care when deciding which lease agreement forms to use in drafting a lease agreement for your rental property.

Found all over the internet, so-called “standard” lease agreement forms can be a dangerous thing to use without making sure they comply with your state’s laws.

Here are some of the problems you may encounter when using a cookie-cutter lease agreement form:

  • Lease provisions you want included may not be on the form you are using, and are thus unenforceable
  • Overly strict clauses may be included that place an undue burden on both you and your tenants
  • Incorrect rules and regulations may be written into the lease agreement unbeknownst to you or your tenants that can cause a dispute later on

If you are not using a reliable property management company that knows how to draft a legally compliant lease agreement highlighting all of the provisions you want, make sure the standard form you use is up-to-date and is compliant with federal, state, and local laws.

 

2. Not Including Insurance Requirements

Though not a legal requirement, Bay Management Group encourages all of our property owners to require their tenants to have renters insurance prior to moving into their rental property.

Here is a quick roundup of reasons why renters insurance is so important, and how not including this in your lease agreement can be a huge mistake:

  • It lessens your chances of losing a lawsuit if your tenant’s personal belongings are damaged, or a tenant or their guest is injured on your property
  • Renters insurance covers damages that may otherwise come out of your homeowners insurance (or worse, your own pocket)
  • It decreases the chances your tenant will leave mid-lease in the event of an emergency because everything including damages, temporary shelter, and food costs are covered
  • It helps you place higher quality tenants that are okay with paying the small monthly fee for added protection

 

3. Not Requiring a Cosigner

require-cosigner-chevy-chase-tenant-has-bad-credit

Not requiring a tenant to have a cosigner, and still approving them to reside in your rental property, can be a major mistake.

When you are screening tenants to place in your Chevy Chase rental property, it is important you ensure the tenant has the following attributes:

  • A verifiable income that meets your monthly demand
  • Creditworthiness
  • Proof of employment
  • Quality references including employers, personal, and prior landlords
  • No criminal history
  • No prior evictions

In an ideal world, every tenant that is interested in leasing your property will make plenty of money, have verifiable references, employment, and previous renting history, and will not have a criminal background.

However, in the case that only some of this is true, building a required cosigner clause into your lease agreement will better protect your interests in the long run.

By allowing your tenant to have a cosigner, you will have better protection should your tenant not be able to pay rent, incur damages beyond normal wear and tear, or have roommates that do not fulfill their part of the lease obligations.

 

4. Failing to Outline Tenant Responsibilities

While residing in your Montgomery County rental home, your tenants are responsible for the general maintenance and upkeep of the property. After all, they will be residing in it for some time and should care for it as though it is their own home.

However, failing to outline in the signed lease agreement exactly what your tenants are responsible for is a mistake on your part.

Sure, you are obligated to provide a safe and habitable home for your tenants. But what about things such as:

  • Plumbing fixtures
  • Pest extermination
  • Simple maintenance such as light bulb replacement, air filter changes, and smoke alarm batteries
  • Landscaping
  • General cleanliness both inside and outside of the property

These are all things that many tenants will take care of without you asking.

However, in order to protect yourself from a dispute in the future, it is best to spell it out for your tenants in the lease agreement.

Additionally, consider adding some general maintenance tricks and tips into the tenant welcome package you should provide your tenants upon move-in.

 

5. Rules Regarding Roommates

set-roommate-rules-lease-agreement-chevy-chase-rental-property

If you are going to allow roommates in your Montgomery County rental property, it is imperative you draft the lease agreement to include some of the following information:

  • Adult Tenant Screening. Require a full background check on any adult that will be residing in your property, regardless of whether they contribute to the rent each month or not.
  • Security Deposit Information. In addition to the general language that goes into a basic lease agreement concerning a security deposit, include additional information outlining that any unpaid rent or damages to the property, regardless of who is at fault, will be taken out of the security deposit at the end of the lease term.
  • Liability Clause. Failing to add a clause concerning joint and several liability is a big mistake on your part if you allow roommates in your property. You want to ensure that if one roommate disappears, the other will be held fully responsible for rent each month, as well as damages at the end of the lease term.
  • Breach of Lease Provision. Your tenants must be aware that the behavior of one roommate affects the entire group of people living in your property. Include in your lease agreement that you have the right to terminate the lease for all tenants residing in your property, even if only one person breaches the lease.

 

In the end, drafting a lease agreement is a large task. And, for those that are unaware of the complexity that comes with lease drafting, it is easy to make mistakes that carry far into the lease term and actually harm your rental property business, investment property, and bottom line.

If you own property in the Montgomery County area and need an experienced property management company to help you draft the perfect lease agreement for your rental property, contact Bay Management Group today.

How to Protect Your Income Property from Spring’s Heavy Rain

Posted on by Bay Management Group

protect-income-property-heavy-rain-bethesda-maryland

With spring in the air, flowers in bloom, and baby birds singing, it can be easy to forget that your Bethesda rental is at risk thanks to heavy rainstorms.  And, with heavy rainfall comes damage, and lots of it.  Flooded basements, overflowing rain gutters, washed out gardens, and so much more can happen to your investment property with just an afternoon of rain.

In order to avoid the spring’s heavy rains from wreaking havoc on your rental property, there are very specific things you should do to protect it.  After all, water damage is not something you or your tenant want to deal with, ever, so why not prevent this from becoming a problem in the first place.

Keep reading to see the best ways to protect your rental property from spring’s heavy (though necessary) rain in order to save yourself the headache and costly repair bills.

 

Avoiding the Damage Spring Rains Can Have on Your Bethesda Rental Property

1. Conduct Seasonal Inspections

It is normal for your Bethesda property management company to perform move-in and move-out inspections of your rental property to ensure your tenants have not caused any property damage.  However, a highly qualified property management company, such as Bay Management Group, knows the importance of routine inspections, especially when the seasons are about to change.

Before spring is in full force, you or your property management company should inspect the exterior of your rental property.  Here are some of the key things to be on the lookout for:

  • After fall and winter have become long lost memories, it is important you clear your property’s gutters of all leaves and other debris.  This is so the gutters can do their job once the spring rains come.  If water cannot flow properly through the gutters, your property may sustain significant water damage.  It is also important to make sure the gutters are firmly attached to the property and that they face away from the property so water drains away from the property and its foundation.
  • Roofs tend to deteriorate over the years and without proper inspections, broken, loose, or missing shingles may go unnoticed, even throughout heavy rainstorms.  Unfortunately, if your property’s roofing is not in tiptop shape, come the rainy season, your tenants may experience some of that rain indoors.
  • Cracks in your rental property’s foundation are inviting places for water to go.  Make sure you check the sidewalk for cracks, seal them appropriately if found, and close all gaps completely.  If you are unsure how to do this properly, enlist the help of a professional to prevent re-cracking later on.

These three things should be at the top of the list for you and your property management company to be on the lookout for every time you inspect the property.  Though your tenants should be maintaining the rain gutters as best they can, problems with the roof and property’s foundation are likely to fall into your hands and become your issue to deal with.  Prevent the costly repairs that come with ignoring these issues and letting spring drop lots of rain directly on top of them by staying on top of the issues and fixing them beforehand.

 

2. Yard Maintenance

maintain-yard-protect-income-property-heavy-rain-damage-bethesda-maryland

Strong winds and torrential rains have the ability to do a lot of damage to your rental home’s yards.  If your tenant is not familiar with the weather patterns in your rental property’s region, inform them at move-in time what they are responsible for come springtime.  This will help to protect your yard, property, and your tenant’s personal belongings.  See how here:

  • Save the yard. Have your Bethesda tenants trim all of the trees, shrubs, and bushes once the weather starts to warm and spring starts to make an appearance.  Wind and rain have the ability to tear up large, loose, or dead tree branches and bushes leaving large holes or damaging plants.  Not only will this be unsightly, it will be costly to replace.
  • Save the property. In addition to causing you a lot of grief when it comes to your well-maintained landscaping, spring rains can also cause damage to your rental property.  If a large tree branch blows off and hits your property, your tenants may have a hole in the wall or broken windows to contend with.  Any tree branches that look loose should be removed.
  • Save the personal belongings. If your tenants have personal belongings such as patio furniture in the backyard of your rental property you may want to suggest to them that they move those items inside during the height of the springtime rains.  This also includes things such as gardening tools, lawn ornaments, BBQ grills, and children’s toys.  A gust of wind that accompanies heavy rains may blow these items into your home damaging both them and the property.  Placing these things inside a shed or garage while not in use is not only a great way to help protect your tenant’s belongings but also keep your property intact.

 

3.  Check Windows

In the past, we have discussed how to know when it is time to replace or repair your windows.  Well, we are here to tell you today that inspecting them before the spring rains hit is as great a time as ever to check them for leaks, broken seals, cracks in the glass, and anything else rendering them weak.

Weak windows are more susceptible to breaking during a strong storm and leaking as the rains hit down hard, thus damaging the interior of your property.  If you wish to avoid a phone call from an upset tenant about a broken window or water damage from a leaking window, it is important to replace or repair any windows that will not withstand heavy rainfall.

 

4.  Get the Right Insurance

correct-insurance-heavy-spring-rains-income-property-bethesda-maryland

Understanding that flood damage coverage does not typically accompany standard homeowners or renters insurance policies is important if you have a property that experiences serious rainfall each year.  Here are some important facts you should know about flood insurance:

 

  • You do not have to live in a serious flood zone to have flood insurance
  • Sometimes rainfall can affect non-flood zones and cause serious damage
  • Understand what your flood insurance covers because it does not always cover everything
  • Know the many types of water damage and get coverage for the type your property is at risk for
  • Flood damage coverage is usually affordable as an add-on to your existing insurance policy
  • It usually takes 30 days for flood damage insurance to kick in so make sure to plan ahead

Knowing these things about flood damage insurance can help protect you in case you aren’t able to protect your property on your own from serious rainfall.

In the end, knowing what you and your tenants can do to protect your rental property from heavy spring rains is essential for maintaining a strong-standing property free of damage.  No property owner wants to get the call that their investment property has been severely damaged in a storm and that the tenants that are residing there must be placed elsewhere while the damage is being repaired.  Thus, the heavy emphasis on preparation.

 

If you want help managing your Bethesda rental property, especially when the heavy spring rains hit, contact Bay Management Group right away.  Not only can we help you with all things property related, we also can help you prepare for instances like heavy rain that have the potential to damage your property.  So, get in touch today and see just how much of a difference Bay Management Group can make for you and your property.

The Best Homeowner’s Insurance Policy For Your Rental Property

Posted on by Bay Management Group

best-homeowners-insurance-policy-rental-property-marylandAs a real estate professional who owns rental property, it is crucial you make an effort to protect your investment in every way possible.  One of the best ways to do that is to have a homeowner’s insurance policy in place from the minute a tenant takes up residence in your income property.

Finding the right homeowner’s insurance policy to fit your needs is no easy task.  With so many different policies available to choose from, it is easy to become confused.  That’s why today we are going to look over the most common types of homeowner’s insurance policies offered so that you can protect your most valuable asset – your rental property.

 

Top Homeowner’s Insurance Policies for Your Investment Property

top-insurance-policies-homeowners-rental-property-marylandThere are several types of homeowner’s insurance policies to pick from, each offering varying levels of coverage.  It is important you research your property’s needs and compare those to the policy you plan to purchase to make sure you have the necessary coverage.

1. HO-1

This is the most basic type of coverage you can have for your investment property.  It only provides dwelling coverage against 10 perils (specific events that cause damage to your property):

  • Volcanic eruption
  • Explosions
  • Fire or smoke
  • Lightning
  • Riots and civil commotion
  • Theft
  • Vandalism
  • Hail and windstorms
  • Damage from vehicles
  • Damage from aircraft

It is important to keep in mind that this policy typically does not cover personal liability, meaning if someone gets hurt while on your property, there will be no coverage for any damages incurred.  However, if you are requiring your tenants to have their own renters insurance policy, this shouldn’t matter.

 

2. HO-2

Also called a broad coverage policy, the HO-2 covers your investment property’s dwelling as well as attached structures such as a detached garage or fence.  Moreover, this type of policy generally covers personal belongings and personal liability.  That said, it only covers the 10 perils listed in the HO-1 policy as well as these six additional perils:

  • Falling objects
  • Weight of sleet, ice, or snow
  • Freezing
  • Accidental overflow of water or stream
  • Sudden or accidental tearing, cracking, burning, or bulging of pipes
  • Sudden or accidental damage from artificially generated electric current

 

3. HO-3

An HO-3 policy is the most common form of homeowner’s insurance policy purchased by homeowners of all types.  It insures your property’s dwelling and detached structures and covers everything except what is excluded from the policy.  The HO-3 is very different from the HO-1 and HO-2 policies and you should research your policy thoroughly before signing an agreement.

Every HO-3 policy will differ slightly depending on the exclusions that your specific policy states.  However, for a general idea of perils that are not covered in an HO-3 policy, check here.  To give you an idea of some of the most common exclusions, many HO-3 homeowner’s insurance policies do not provide coverage in the case of an earthquake or flood.  This means that if you are in a region that is prone to those types of natural disasters, you might want to consider purchasing additional insurance on top of your HO-3 policy to protect your property.

 

4. HO-4

This special type of homeowner’s insurance is designed to protect your tenants’ personal belongings and any personal liability claims involving the tenant.  Additionally, this policy covers displacement costs should your tenant have to reside elsewhere because of damage to your property, medical bills due to an injury, and the basic liability coverage should your tenant sue.

This is not something you would normally purchase if you require your tenants to have renters insurance.  However, if you do not require renters insurance, this might give your (and of course your tenants) an extra layer of security in the case of an emergency.

 

5. HO-5

Noted as the best homeowner’s insurance policy you can have thanks to its broad range of coverage, the HO-5 operates similar to an HO-3 in that the only perils not covered under the policy are those that are specifically listed in the policy itself.  However, the HO-5 differs from an HO-3 because it typically covers more perils and has personalized limit options when it comes to personal liability coverage amounts.  This type of insurance is usually the most expensive because it covers the widest range of damages.

 

In the end, protecting your most important asset should be your primary concern when in the rental property business.  After all, a damaged property does you no good, especially if there is no insurance policy in place to cover the expenses incurred.

Before agreeing to a specific homeowner’s insurance policy for your investment property, make sure you discuss your individual needs with a qualified insurance agent so there are no surprises in the event of an emergency.  With all of the options available, there is sure to be a homeowner’s insurance policy to match your needs and budget.

Finding the Perfect Real Estate Agent for Your Investment Property

Posted on by Bay Management Group

finding-perfect-real-estate-agent-investment-property-marylandFinding a reliable real estate agent is essential to anyone looking to purchase a piece of real estate. Whether you are a real estate professional looking to expand your portfolio or a casual home buyer, picking a real estate agent you can trust is a must when it comes to buying or selling homes.

But how do you go about finding the right agent for you?

The best agent for you is not always going to be the most familiar real estate name in the biz, the one who has sold the most homes in the area you are interested in or the one working for the largest brokerage. In fact, many times those things will not matter at all.

What will matter is that you find someone that acts in a professional and ethical way, is willing to listen to your needs and knows the market you are looking to enter.

Today we will take a look at what role a real estate agent plays in the home purchasing process and provide you with some helpful tips for finding the right real estate agent for you.

 

What is a Real Estate Agent?

real-estate-agent-maryland-rental-propertyReal estate agents are licensed professionals that represent buyers and sellers in real estate transactions. Many times a real estate agent will work under one of the following:

  • Real Estate Broker: A professional or firm in the real estate business that charges a fee or commission for conducting buy and sell transactions of real estate initiatives. They also handle the earnest money deposit and escrow account. A real estate agent that works under a broker is licensed to help people buy and sell property.
  • Realtor: A real estate professional that is a member of the National Association of Realtors. They are considered expert real estate agents and are more educated than your typical real estate agent.

A real estate agent’s duties will depend on whether they are representing a buyer or seller in the purchase process.

If representing the seller, a real estate agent will advise the client on how to price the property, how to prepare the property for sale and what improvements can be made to boost the value of the home. They also promote the property through things such as listing services, networking platforms and traditional advertisements via online or newspaper ads.

If representing the buyer, a real estate agent will search for available properties that match the buyer’s needs and price range and arrange for the purchase of the property.

 

How to Find the Perfect Real Estate Agent

find-perfect-real-estate-agent-maryland-rental-propertyNow that you know what a real estate agent is responsible for, let’s look at some things that can help guide you to an agent that works best for you.

Get Referrals

Satisfied customers of exceptional real estate agents will not hesitate to refer them to family, friends and co-workers. In fact, word-of-mouth is one of the best ways to find out if meeting with a potential real estate agent is a good idea. Here are some things you should discuss with those that have had experience with a real estate agent:

  • What was the experience like from start to finish?
  • How satisfied were you at the end of the process?
  • Did the agent truly listen to your wants and needs?
  • Did the agent give you exactly what you wanted?
  • What did the agent do that exceeded you expectations?
  • How likely are you to refer them to others and why?

Visit Open Houses on Your Ownopen-house-rental-property-marylandOne way to see an agent in their element is to visit an open house in the market you are interested in. This is an informal way for you to meet the agent and get a first impression that may encourage you to pursue them as your agent.

Observe how prepared and knowledgeable the agent seems. Notice how the open house is set up (should you be in the market to sell your home) and decide if the setup is something you would want for your home. In addition, notice the energy you get from your interactions with the agent. Although not always right initially, your feelings about someone upon a first meeting are usually right.

Lastly, make sure you know who the listing agent is on the open house. Experience is a must when it comes to choosing a real estate agent. Just because an agent has attended an open house does not mean the property is theirs to sell.

 

Check Their Experience Level

The goal of finding a great real estate agent is to find someone experienced in doing deals that are similar to the one you are interested in conducting. For example, if you are looking to buy a starter home that will fit your family’s needs, finding a real estate agent that has experience only in luxury condo sales is probably not going to be a good fit.

You need an agent that understands the market, whether you are looking to buy or sell. Additionally, an experienced agent will have many connections, will know of properties that are considered off-market that may suit your taste and have the negotiation skills to help get your offers accepted.

 

Match These Qualities

There are plenty of different personalities, experience levels and success rates floating around the real estate industry that can confuse anyone when it comes to choosing a good real estate agent. Make a list of the personality traits you are looking for in an agent and look for someone that matches the majority of them prior to hiring them to help you buy or sell your property:

  • Make sure they are licensed. Being a real estate broker or Realtor is not required. However, your real estate agent’s license should be in good standing. In addition, they should have zero complaints against them. This information can easily be Googled.
  • Knowledge is key. You want to find an agent that excels in the type of real estate transaction you are interested in. Residential and commercial properties are very different. Short sales or foreclosures have their own individual issues to contend with. Buying versus selling makes all the difference.
  • Communication is also key. This seems like an obvious point but unfortunately with many real estate agents, communication is not a strong point. It is your right to know what is going on with your real estate transaction at all times. Make sure you are receiving regular updates in your preferred method (email, phone, text). Also, make sure you can easily get in touch with your agent should you have any questions or concerns.

In addition to these important qualities you want to make sure you find a real estate agent that is truthful, has integrity and performs their job with pride. Investing in a property is a big deal and is one that does not come cheap. Someone who does not understand this is not worthy of your time or money.

 

If you are looking for a real estate agent to represent you in your real estate endeavors, take note of the above-mentioned tips. They will go a long way when it comes to choosing the right agent to represent you and get you the best deal possible, no matter which side of the bargain you are on.

Your Go-To Checklist for Investing in a Rental Property

Posted on by Bay Management Group

go-checklist-investing-rental-propertyInvesting in an Anne Arundel County rental property is on many people’s minds these days. Located near major industries, the shore of Chesapeake Bay, and larger cities such as Baltimore, Anne Arundel County is a great location to live in.

However, if you are just starting out in the rental property business, it can feel quite daunting; there is so much to think about all at once. Chances are you have a lot to learn about investing in property if you have no prior experience and if you don’t have someone guiding you through the process.

Thus, we have composed a helpful checklist you can reference when it comes time for you to purchase your first Anne Arundel County rental property. This checklist will provide you a basic understanding of what it takes to be successful in your rental property investments.

 

Anne Arundel Rental Property Investment Checklist

Expediting the purchase of an investment property in the Anne Arundel County area will help you get tenants in your property and begin the process of collecting rent quickly. That, of course, means the money will start rolling in right away. So in order to not waste time, look at this valuable list of things you should do when investing in rental property.

 

1. Research the Location

research-location-rental-property-investmentSure, Anne Arundel County is a prime rental home location. However, before jumping in and making an investment decision, research the surrounding area of the properties you are interested in. This means scoping out things such as:

  • Schools
  • Shopping centers
  • Sports arenas
  • Restaurants
  • Nearby housing options
  • Major freeways
  • Entertainment halls

Investing in a property that is near a booming section of the city will help attract tenants because it means more jobs and amenities for residents. Additionally, a booming location will likely allow you to raise your monthly rental rates in the nearby future, as well as allow you to increase the value of your property should you choose to sell.

 

2. Check with the Competition

Before investing your hard-earned cash into a property in hopes of making a large amount of positive cash flow, make sure you research your competition. When it comes to property investments, competition can mean one of two things:

  • Local competition. It is crucial you check the surrounding area and comparable properties to make sure of two things. The first is that you are getting a fair deal when it comes to purchase price. The second is that other rentals similar to your property are leasing for enough to cover your rental property’s future mortgage and make you a profit as well.
  • National competition. In addition to local prices, it is a good idea to check the national averages for comparable properties. This will give you a good idea as to whether your investment choice is a sound one compared to what the national market is experiencing.

In the end, you want to aim for getting the best deal possible on any property you purchase, while making sure there is room for a high rental yield and capital growth over time. The point is to find the perfect balance between getting a great deal and having room for value growth.

 

3. Have a Plan

plan-rental-property-investment-anne-arundel-countyInvesting in a rental property is going to take a lot of time and money. It is important you get everyone that can help you onboard from the beginning. This includes your financial advisor, banker, accountant, and/or mortgage broker. These professionals are experts at handling your money, have a full understanding of your overall wealth, and can help you decide which price range is going to be the responsible range for you.

 

4. Learn the Purchasing Process

Buyers of rental property should always understand each step that is involved in the purchasing process. And, while the steps may not always be the same for everyone looking to invest in rental property, Zillow real estate experts state that the purchasing process should always generally follow these seven steps:

  • Offer and Contract. Once you find a property that interests you, assuming it is within your budget, you need to sign a written contract telling the seller you want to move forward with the purchasing process. Make sure this legally binding contract is drawn up professionally and you read every line carefully. You will want to know what provisions allow you to back out of the sale and what your responsibilities as the buyer are.
  • Receive Disclosure Documents. Anyone selling a property must provide you with disclosure documents, a title report, and any city reports that will reveal specific information that could persuade you to stop moving forward with the property purchase. These documents will disclose any issues the property has that may affect its value.
  • Appraisal Process. In order to receive a loan from the bank to purchase something as large as an investment property, the bank will have a professional appraiser inspect the home and make sure the agreed upon purchase price is correct, according to the property’s value. If the property is found to be overpriced, the bank may choose to deny your loan approval or place extra provisions into the loan agreement that you must follow.
  • Conduct Inspections. As a buyer, you will want to inspect the property you are about to invest in to make sure everything is in working order. For example, the property’s foundation, plumbing and electrical systems, HVAC system, and more are checked for flaws and reported back to you.
  • Full Loan Approval. After the appraisal process has been completed, the bank will want to run your credit history, verify your income, and inspect your debt-to-income ratio before finalizing the loan. Additionally, the bank will ensure the property you want to invest in has no prior liens placed on it because that will affect the property’s value.
  • Perform a Final Walk-Through. Right before the closing process completes, make sure you conduct a final walk-through of your property for any last minute discrepancies. You should also ensure any issues found during the inspection process have been fixed.
  • Closing Process. This process typically takes place with an escrow officer. During closing, the purchase papers are signed by both the buyer and seller and finalized as complete. Your Anne Arundel County rental property will now officially be yours.

Understanding the purchase process will allow you to feel more comfortable in your investment decision. You want to make sure you know exactly what is happening and why so that you aren’t pressured into making any decisions you are not 100% comfortable making.

 

Investing in rental property can be a complicated and drawn out process. However, by understanding what you are getting yourself into and by being as prepared as possible with professionals to help you along the way, investing in rental property can be a very lucrative thing.

 

In the event you find yourself wanting or needing help managing your rental property in Anne Arundel County, contact Bay Management Group today. With extensive knowledge of the rental property business, and specialized services to help manage everything from tenant placement to rent collection, maintenance calls to regular inspections, this Anne Arundel County property management company has everything required to keep your property occupied, maintained, and appealing at all times.

Bay Management Group has what it takes to make sure your investment property is being well cared for by the high quality tenants we help place in your property. So contact us today to see how we can help you with your newly acquired rental property.